Parish councils are to be given sweeping new powers to run their local
neighbourhoods - including licensing pubs and bringing in parking schemes.

Local communities will also be able to operate libraries, museums and even deal with low-level anti-social behaviour under “power to the people” plans to be announced on Monday.

The Sunday Telegraph understands that the driving force behind the coalition’s flagship public services white paper will be new moves towards “localism” and away from top-down “Whitehall knows best” approach.

Senior government courses say this will mean devolving powers as far down as possible - to small neighbourhood bodies such as parish councils and their equivalents.

Currently parish and town councils deal only with such minor issues as allotments, public toilets, pathways, village halls and litter.

However, the white paper will propose a big extension of their powers which would effectively see small groups of local residents take over responsibilities which are now held by larger bodies such as town halls and county councils.

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They could rule on licensing hours for pubs and clubs, bring in new traffic restrictions in towns and villages, including speed limits, and run parks and leisure facilities.

A coalition source said: “We want people to be given the green light to take over local services to ensure they are run by the local community, for the local community.

“We need to end once and for all this way of making decisions from the top down and assuming that Whitehall or county councils know what best suits individual neighbourhoods. Parish councils can do all that.”

Ministers say the proposals will build on plans already announced to let neighbourhoods take charge of planning - with residents given the chance to approve or reject neighbourhood plans in local referendums.

The white paper will also commit ministers to investigating ways of making it easier for groups of people to band together to run local services.

It will propose allowing individuals to be given cash budgets by the government to buy services for themselves rather than being dictated to by local authorities in several key areas including treatment for the elderly and those with long-term health conditions, ad the parents of special-needs children.

David Cameron hopes the reforms will be seen as part of his “big society” plans to change the way lives are lived in Britain by the time of the next election in 2015.

The white paper has been the subject of fierce wrangling for months with claims that George Osborne, the Chancellor, widely reported to have serious doubts about it.

There were also reports that its main architect, Steve Hilton, Mr Cameron’s policy guru, was ready to quit 10 Downing Street because his plans were being frustrated.

A deal was done last month and a source said last night: “It’s a win for Steve - he got pretty much everything he wanted.”

Tessa Jowell, the shadow cabinet office minister, said the proposals must meet three tests.

“Will these reforms make services more accountable and responsive to the needs of services users? Will there be clear accountability for the way that public money is spent and members of the public are protected? Will their proposals strengthen the bonds of community and family life?” she asked.